DOTC may revise terms of LRT project

The Department of Transportation and Communications (DOTC) may revise the existing terms of a major deal to operate and expand the Light Rail Transit (LRT) Line 1 to address concerns of the private sector after Thursday’s unsuccessful auction, Transportation Secretary Joseph Abaya said.

The companies might reconsider the project if the government improved its terms, officials from three of the bidding groups told the Inquirer Friday.

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Abaya said in the statement that the government wanted to ensure that the LRT Line 1 expansion to Cavite province would proceed with construction by the second half of 2014.

This would include “the possibility of extending the bidding process and reevaluating the existing terms to further address the commercial issues raised by the pre-qualified bidders,” he said in the statement.

On Thursday, consortiums led by San Miguel Corp., DMCI Holdings and MTD-Samsung of Malaysia and South Korea did not submit the required technical and financial proposals.

Metro Pacific, whose partner Ayala Corp. pulled out of the project, submitted an offer through Light Rail Manila but this would likely be rejected by the government given the conditional nature of its bid, according to Transportation Undersecretary Jose Lotilla.

Bidders interviewed by the Inquirer yesterday pointed to “unquantified risks,” advance payments being sought by the government and even uncertainties over the right-of-way as their reasons for backing out.

Isidro Consunji, president of DMCI Holdings, said the project would not succeed if the government did not offer a type of subsidy.